WACKER’s financing strategy follows two equally important goals:
- To finance corporate growth as far as possible without outside help
- To sustain a positive earnings contribution and net cash flow
We cover our capital requirements from operating cash flow, and from short-term and long-term financing. See further details on Financial Position
We ensure the Group’s permanent solvency via rolling cash-flow management, and adequate credit lines guaranteed in writing. Financing requirements are calculated for the entire Group, with funding usually being granted at a Group level. Project-specific or regional funding is available in special cases.
Financing Measures in 2010
In 2010, financing options for companies were easier than during the crisis year of 2009. Consequently, WACKER prematurely replaced a syndicated credit line of €150 million (taken out in 2009 for a term of three years) with a syndicated credit line of €200 million and a term of five years. The credit line was placed within WACKER’s circle of core collaborating banks. It is not currently being tapped, but is rather in reserve. For our investments in China, we have a long-term “club deal” with local Chinese banks totaling €30.7 million. As regards the €400 million credit line concluded with the European Investment Bank back in 2009, we utilized €200 million in December 2010.
The positive earnings and liquidity situation allowed us to prematurely pay down installments on a promissory note (Schuldschein) of €180 million. As a result, €151 million has already been paid back.
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Financing Measures in 2010 |
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Volume in € million |
Term until | ||
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Loans taken out/new contracts |
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Syndicated credit line |
200 |
2015 | ||
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Bilateral loan (EIB) |
200 |
2016 | ||
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Syndicated loans in China |
31 |
2019 | ||
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Loans paid back |
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Promissory note |
151 |
Early repayment 2010 |
No collateral exists for financial liabilities. Some of the liabilities to banks are fixed-interest and others have variable interest rates. Thus, as per December 31, 2010, WACKER has credit lines of around €1.2 billion with terms of over one year. The measures concluded contain standard market credit terms and the net debt-to-EBITDA ratio as the only financial covenants.
WACKER collaborates with a number of banks (core-bank principle). They must have an investment-grade credit rating and a long-term business model. To minimize counterparty and concentration risks, a bank’s stake in the credit lines promised to WACKER must not exceed 20 percent.